Siwss law relaxes foreign ownership rule

New laws are being drafted in Switzerland to make it easier for foreign investors to buy property although it could be 18 months before they are passed.

Buying property in Switzerland is harder than in many other European nations because of rules imposed more than 30 years ago limiting what most foreigners can buy and where they can buy it. Despite some relaxation of the regulations in recent years, buying can be problematic.

Earlier this year the Swiss government proposed the abolition of all limits on foreigners who want to buy real estate, saying the original law from the 1970s was outdated. Now it is consulting on the draft form of new laws.

'It is a good sign that Switzerland's property market is definitely opening up,' said Thomas Oberle of the Swiss Home Owners Association. The changes reflect a broader shift in Switzerland, where in the 1970s, a wave of Swiss nationalism opposed foreigners buying property for vacation homes.

But now parts of the country have become reliant on tourism and welcome a change in the law. 'In order to keep their own economies growing many cantons are interested in having a law which is less tough,' added Oberle.

Currently citizens of European Union states, as well as Norway, Iceland and Liechtenstein, who work in Switzerland have the same rights to purchase real estate as Swiss nationals. Other foreigners working in the country, including Americans, are exempt from the restrictions only if they plan to use a property as a primary residence.

If, however you take up full-time residence in Switzerland, and make a tax arrangement with the local authorities, then you are exempt from the regulations.

In designated tourist areas, usually Alpine regions with ski facilities like Gstaad, Verbier or St. Moritz, current laws limit all other foreigners - like people who do not live or work in Switzerland but want to invest in real estate - to owning just one property. And each year only 1,400 units, whether apartments, houses or land, may be purchased by such foreigners. Some communes with ski resorts, St. Moritz, for instance, also have supplementary restrictions, often banning nonresident foreigners from buying at all in certain areas.

Jürg Schumacher, an official from Switzerland's Justice Ministry who is working on the property law revision, said the changes are long overdue. The current law only encourages people to try to find a way round the rules, he said.

For example Valais and Vaud, having reached their limits for selling to non-resident foreigners have argued for extra sales because other cantons were not using their complete quotas.

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